Ron Paul slams stimulus package, Fed rate cuts

Via LRCBlog: Jan 27, 2008 (LBO) – Republican presidential hopeful Ron Paul has slammed a US economic stimulus package based on tax-refunds and called for fiscal prudence and less Federal Reserve money printing, which caused the current turmoil in the first place.

Talking to Fox News television Paul asked where the money for the tax refunds - the cornerstone of the Bush administration stimulus package - was coming from.

"Where is the money coming from? We don't have any money over here in Washington," Paul told Fox News's Your World with Neil Cavuto.

"We have consumed everything we have gotten. So, we either have to borrow it from China or we print the money, which is inflationary. So, I'm opposed to that."

Paul says Federal Reserve moves to cut rates would further hurt the US dollar. Paul, a congressmen representing Texas, is also on the House Financial Services Committee and the Joint Economic Committee. He is a strong advocate of sound monetary policy.

The sub-prime bubble he points out was caused by rates as low as one percent maintained by the Fed under Alan Greenspan which led to reckless lending and a property bubble. Now the Fed was giving its own 'stimulus' by cutting rates.

"This is a bit of a fiction, too, because the problem comes from artificially low interest rates," he pointed out.

"And we can't solve the problems of a weak dollar by printing more dollars."

"So, I think the dollar is still going to remain under attack, because you can't solve the problem of too much credit stimulus by more credit stimulus, because it will just lead to a weaker dollar. And I think they [Fed] are between a rock and a hard place."(...)"